How payroll software can make your life easier
Whether you have one employee or 10,000, few operations are more business-critical than payroll.
Payroll software makes the business of calculating accurate, timely payments faster, while taking away much of the burden of understanding complicated payroll legislation and payroll systems operation.
This means that, ultimately, your administrative expenses are also reduced and you will have more time to spend on other things.
So the most obvious advantage for any business is being able to complete payroll calculations in a fraction of the time it would take otherwise. What’s more, year-end reporting is usually automated at the same time, so you will also have archive copies of annual reports and payslips for later access if needed.
However, there’s more to payroll systems than just having statutory deductions such as National Insurance Contributions and income tax calculated automatically with running totals.
The software can also be integrated with timesheet systems that record hours worked and staff attendance, so information can be transferred across to the payroll system automatically, allowing for a variety of reports to be created as necessary.
This means you can analyse your labour expenses for the entire business in detail, as well as across departments, contracts and even individual roles.
What’s more, in some payroll systems, additional information – for example annual leave and sickness records – can be incorporated, so that a separate software package isn’t needed for these functions. All relevant data on any employee is located in the same place, and you thus become more effective at managing staff absences.
Additionally, a payroll package’s “what if” calculations allow you to predict and plan employee costs and budgeting, by inputting hypothetical figures to assess how much any given staff member costs in total.
Some payroll systems have handy additional functions such as being able to send payslips directly to employees’ smartphones.
Of course, there are a number of provisos. Staff must be trained properly in the use of any new software package, and you will need to choose a reliable supplier for your payroll system, not least because you will depend on them for support if anything goes wrong, as well as for training and regular updates and upgrades when there are changes in tax and other legislation.
You also need to have confidence that your system has all the tools required to pay staff with accuracy and on time, and that you always comply with current payroll legislation.
Check that your supplier is financially viable, with good references, and that their software is accredited under HMRC’s regularly updated Payroll Standard Accreditation Scheme, which tests all packages yearly to check they still comply with current legislation. And if you are a sole trader or feel your business has not yet reached the stage where it can justify the outlay on payroll software, you may prefer to secure the services of one of FourM’s professional, accredited bookkeepers to assist with your company’s payroll services on a weekly, fortnightly or monthly basis.